Fintech is an umbrella term term for technologies powering innovation in financial services.
This Business Insider Intelligence report cites three key factors for “true innovation” that are creating the ideal environment for fintech to flourish.
1. Legal Factors
Governments need to make streamlined environments for sustainable fintech growth by reducing the number of regulatory hurdles. Many governments are creating “fintech sandboxes” for startups to test new financial products with real customers before needing a formal license.
Some governments, including in Australia, are creating a “fintech bridge” or an information network between countries that encourages the proliferation of shared research findings, regulatory insights and even encourages international scaling.
2. Solving a problem
Fintechs have identified three key problems in the financial services industry: trust, transparency and “one size fits all”.
According to this report, only 54% of global consumers trust financial services. Fintechs are leveraging their access to real time data to showcase products, fees and services that are useful to the customer. Over 70% of consumers believe that sharing their data should result in a personalised product.
3. Effectively implemented
Startup and legacy players need to find a way to partner effectively in order to create sustainable business growth. One of the most common ways that this occurs is through newcomers partnering up with incumbents to provide services that improve efficiency and customer service.
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